Export Import Procedures & Documents

Suvarna Sable

Evaluation Two class test

Presentation

Assignment

BOOKS: Kale and Ahmed

Trade

Sale of goods by one country purchase of goods by one country purchase of goods by one country &

to another country from another country selling to another country

EXPORT ENTREPORT (re-export)

TRADE

IMPORT

Export: "Export" means to send or take controlled tangible items, software or information out of the

- shipping, mailed, hand-delivered, shipped by air, shipped by boat, uploaded to an internet site, or downloaded from an internet site, fax or can be shared during a telephone conversation.

The seller = "exporter" based in the country of export

overseas based

when you trade something out of the country

Import: To have a product shipped into a country or region.

opposite of export.

you are faced with barriers

- differing languages, politics, laws, governments and cultures.

http://www.investorwords.com/3874/product.htmlhttp://www.businessdictionary.com/definition/country.htmlhttp://www.investorwords.com/4120/region.htmlhttp://www.investorwords.com/1852/export.html

Modes of import export

East India Company

HISTORY

From around 1600AD the British East India Company (EIC) started trading with India in goods such as spices, silk and tea.

By 1700 the EIC had set-up three trading posts, in Bombay, Madras and Calcutta

Till now purpose was Trade

Robert Clive Conquers India In 1751

-1947

India-born Sanjiv Mehta

Bought East India Company - 2005

relaunched East India Company - 2010

Need of Export-Import No country in world is self sufficient in all respects.

It has to import some goods/services from abroad.

Due to geographical factors, inadequate resources & technological

development, huge population, economic backwardness.

Various organization working towards it.

Export- Gems & jewellary , cotton, carpet(excl. silk) handmade ,

rice , cashew, tea , tobacco , dairy products , sugar etc

Import-petroleum, crude & products , gold , organic chemicals ,

coal, coke, fertilizers manufactured , cement etc

Export marketing

Management of various activities and operations since the receipt of an

export order till its execution and receipt of payment for the goods

exported.

Need for Export marketing:

AT NATIONAL LEVEL:

1. Earning foreign Exchange:

- enables country to earn foreign exchange.(Next Slide)

- Helps to strengthen national Economy

- helps to import needed goods & services in return.

2. Solving balance of payment problem:

- deficit balance of trade &payment can be removed through large scale

exports.

3. Promoting economic development:

-Optimum utilization of resources may not be possible within domestic

market.

- Business grows rapidly if it has access to international markets.

4. Raising Production and employment:

- Facilitates large scale production of goods & services.

- Additional demand in overseas market generates new employment

opportunities.

5.Participation in global co-operation:

- Cordial relationship develop among nations.

- helps countries to bring world peace & economic development at global level.

AT BUSINESS/ENTERPRISE LEVEL

1. Higher profits: -Exporter offer quality product they can charge higher prices , thus higher

profits.

Ex: TOYOTA, MERCEDEZ etc.

2.Goodwill & reputation:

- Due to their business contacts

- Participation in international trade fairs and exhibitions. Ex: BKC

3. Improvement in organizational efficiency:

- Exporters have to adopt advanced production & Mktg techniques for

survival in global competition.

Ex: Tata Group-exports nano In EU markets.

4. Spreading of marketing risks:

- Risk spread in two parts.

-if one area suffers losses in export market then stable profit is there in

domestic market.

- Ex: TCS

Export marketing Organizations Specialized organizations concerned with export trade

Look after export of Indian goods & services.

Explore foreign markets

Make arrangements to send goods to foreign buyers as per the orders

received/collected.

TYPES

1. Manufacturer Exporters

2. Merchant Exporters

3. Star Trading Houses of five categories

4. Canalising Agencies

5. State Export Corporations

6. Export Consortia

7. Government(public sector) Trading/Marketing Corporations.

Manufacturer Exporters

Undertaken by large & established organization as financial support is needed.

Export along with production & mktg activities.

Undertake exports directly along with manufacturing and marketing within the

country.

Not dependent on intermediaries for exporting their products

With increase in export business companies -

- Export manager is appointed exclusively for export operations.

- Create separate export division to look into export marketing.

- Ex :Tata Exports separate organizational structure looks after exports of Tata

Group.

- Establish subsidiary companies for export marketing.

- Ex: HMT(International) Ltd. Export marktg subsidiary company of HMT Ltd.

assigned the task of exploring ,developing & expanding export markets for the

products of HMT.

Merchant Exporters

Person or organization whose business is to buy goods made in

his home country, ship them abroad to another country & sell

them there.

Specialized & concentrates in Exporting Indian goods only.

They purchase goods from domestic manufacturer & then export

Operate on commission basis.

Export wide variety of goods-manufacturing

items,friuts,vegetables flowers etc.

Ex: Ezzy Exports-leading merchant exporter of Machineries,

Agro based,Garments,household.

Manufacturer-Exporter

Meaning: basically manufacturer but

also exports his products

Profit: Earns from products

manufactured by him only.

Capital Requirement: Requires huge

capital as-production & mktg are

also performed by him

Ex: Tata Group, Kirloskar group

Merchant -Exporter

Meaning: middleman in export mktg

& looks after exporting goods.

Commission: earns from products

manufactured by domestic

manufacturer.

Requires little capital as not

concerned with manufacturing only

exporting of goods.

EX: Ezzy Exports

Government(public sector) Trading/Marketing Corporations

Set up by Government of India

Handle export import transactions.

Function by maintaining Branches/Offices abroad

Operate as per guidelines issued by Govt.of India.

EX:

1.The State Trading Corporation of India(STC)- Petroleum Products, Cement, Rice, Wheat Flour and Liquefied Petroleum Gas (LPG)

2. The minerals & Metals Trading Corporation(MMTC).

3. Government corporations:-

- Jute corporation of India,

- Cotton corporation of India

Star Export Houses(SEHs)

Category/status Performance Value (In Crores) over a period of 3 years

One star Export House 15

Two star Export House 100

Three star Export House 500

Four star Export House 1500

Five star Export House 5000

Export of goods of small scale sector

market

Assistance in quality improvement as they are aware of foreign markets

Supply of imported inputs to clients

Undertake marketing risks on behalf of small scale producers.

Export Import documentation

Goods are imported in India or exported from India through sea, air or land. Goods can come through post parcel or as baggage with passengers.

Export-import requires special document depending upon the type of product and destination to be exported-imported.

Called as shipping documents.

Aligned Documentation Systems(ADS)

In India since 1991 new standardized documents are introduced by Govt.

under A(united) DS based on UN Layout key.

Exporters use such standard form while preparing various export documents.

Objectives:

- Provide benefit to every party associated with international trade.

- Facilitate easy entry of data and enables quick reading.

- Simplification in export import procedures.

- Simplifies trade documentation on a global level thereby helping all parties

involved in the trade.

Classification of Documents

Documents

Commercial Documents

Regulatory Documents

Commercial documents Help in Import-Export

Out of 16 commercial documents,14 documents have been standardized

(Excel sheet)

Objectives:

1.To facilitate transfer of title of goods & property from the exporter to importer.

2. To ensure safe transfer of goods from the country of the exporter to country

of the importer.

3. To help the exporters to realize payments without problem and delay.

Documents Include:

1. Certificate of origin

2. Bill of Lading

3. Certification of inspection,etc.

Regulatory Documents Prescribed by various government departments and bodies covering foreign

exchange regulations, export inspection, custom formalities etc.

Out of regulatory documents 4 have been standardized.

Documents Include:

1. Form GR(Goods Receipt)

2. Shipping Bill, etc.

Export Documents

1.Invoice-

- Commercial Invoice

- Consular Invoice

2.Certificate of origin

3.Shipping Bill

4.Mate Receipt Transport documents

5.Bill of Lading

6.GR form

7.Marine insurance Policies

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34

Invoice An invoice or bill is a commercial document

issued by a seller to the buyer.

Indicates the products, quantities, and

agreed prices for products or services the seller

has provided the buyer.

An invoice indicates the buyer must pay the

seller, according to the payment terms.

Sample

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Commercial Invoice Statement of account sent by the seller to the buyer

letter- head(next slide).

Objective:

Inform buyer about the conditions of sale and final amount payable

Features:

Detail information of export trade transactions.

No standard form of document so exporter is free to design his own format.

Importance/Uses:

Exporter:

-for collection of payment from the importer.

-To settle dispute about payment

-Useful for accounting purpose

Importer:

-Payment of customs duty

-Indicates Exact amount payable to the exporter

-Useful for accounting purpose.

Consular Invoice

goods of particular value are being imported from particular country by

particular importer.

Features:

- Submitted by exporter(3 copies)

- Gets it certified by the consulate of the importing country stationed in the

exporting company.

- A small fee is charged by consulate office for this facility.

- 1 copy- Consulate office

1 copy- Customs

1 copy- Exporter

Importance/Uses:

Exporter

-Facilitates easy clearance of goods from the customs

-Signed by consulate of the importing country, it is assured to exporter that

goods will enter into buyers country without any difficulty.

Importer:

Gets quick delivery of goods & that too with out opening containers for

verification purpose.

Loss of time and repacking of goods is avoided.

Importer is assured that banned goods are not sent.

Evidence that goods are loaded in the vessel.

Acknowledgement of the goods received on board of the ship.

Contents:

Name of the ship and shipping company

Date of shipment

Description of packages (Quality,quantity,etc)

Number of packages and marks on them

Condition of cargo when it was received on board.

Port of loading and delivery

Freight(goods) paid or payable

Signature of issuing authority.

Without Defect With Defect

Receipt

Clean Receipt

Qualified Receipt

Clean Receipt:

- Goods have been properly packed

- There is no defect of any kind in the packing.

Qualified Receipt:

- Packing is defective

- Shipping company will not be responsible for damage of any

kind.

Exporter should get a clean receipt to avoid any complications.

Bill of Lading (B/L) (Xerox) B/L is a document of title to the goods.

Issued by shipping company & serves as a receipt from the shipping

company which undertakes to deliver the goods at agreed destination on

payment of freight.

Functions of B/L :

1. Receipt for goods: serves as receipt by shipping company stating that the

goods have been received for transportation.

2. Proof of contract of carriage: Exporters are required to book shipping

space much in advance. B/L serves as a proof of the terms & conditions

under which goods are carried by shipping company.

3. Document of title to goods: The possession of B/L gives right to the goods

covered by it.

Contents: 1. Name & address of the shipper/consignee

2. Name of the shipping company

3. Name of the ship, voyage number and date of loading goods on the ship

4. Quantity.quality,marks and description of goods

5. Number of originals issued

6. Port of shipment & destination & date of loading.

7. Number of packages

8. Signature of issuing authority

Types of B/L

Bill of Lading

Clean B/L

Freight collect B/L

Claused B/L

Direct B/L

Freight paid B/L

Through B/L

A bill of lading issued by a carrier declaring that the goods have been received in an appropriate condition, without the presence of defects.

The product carrier will issue a clean bill after thoroughly inspecting the packages for any damage, missing quantities or deviations in quality.

Clean B/L

Claused B/L

A bill of lading that shows a shortfall or damage in the delivered goods.

Some adverse remarks-goods not properly

Typically, if the shipped products deviate from the delivery specifications or expected quality, the receiver may declare a claused bill of lading.

Freight paid B/L

- Freight is paid by exporter

Freight collect B/L

-Freight is not paid by the exporter

Direct B/L

-same ship carries goods from the port of shipment to the port destination

Through B/L

- Covers goods being trans-shipped on route

-at least two different modes of transport being used.

- B/L issued for containerized door-to-door shipments that have to use different ships and/or different means oftransportation (aircraft, railcars, ships, trucks, etc.) from origin to destination.

http://www.businessdictionary.com/definition/containerized.htmlhttp://www.businessdictionary.com/definition/shipment.htmlhttp://www.businessdictionary.com/definition/mean.htmlhttp://www.businessdictionary.com/definition/transportation.html

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up

VW Gro

up

Schnelecke A05

Terminal Melnk

Bremenhafen

JNPT Mumbai

SAIPL CP8

1-5 Days 2 Day 3 Days 1 Day 3 Day 21 Days 2 Days 1 Day 2 Day

Sea Travel

U33 A4/A5

Preymesser B5

40 Days

Mumbai~

54

Container Docking

Assembly Progress

A A A

Container On Sea Unloading at Port Stacking at port

Receipt of Material Storing of Material Issue of Material

Physical Issue of

Material

Custom Clearance From Mumbai to

Aurangabad

Gate Entry at SAIPL

55

Importance / Benefits of B/L : Exporter:

-Legal document-in case of dispute it can be presented in court of law.

-Contract of transportation

-Acknowledgement of the receipt of the goods on board the ship

-It enables the exporter to send a shipment advice to the buyer

-Helps exporter to file claim of compensation, if goods are damaged in transit.

Importer:

- Document of title.

- Semi-negotiable document-ownership can be transferred by endorsement

and delivery.

Shipping company:

- Enables shipping company to collect freight either from exporter or

importer.

- Protects the shipping company goods damaged before loading on the ship

is shown in B/L

Guaranteed receipt Form-Xerox

Exchange control document

Submitted to Reserve bank of India after clearance from the customs

Authorities.

Designed mainly to furnish guarantee to RBI to remit(send) the foreign

exchange earned from the export shipment within 180 days from the date

export.

Features:

-Declaration and assurance as regards foreign exchange receivable out of the

export transaction.

-As per the exchange control regulations, the exporter has to realize export

proceeds within a period of 6 months from the date of shipment from India.

- Unless form GR is presented with full particulars, the customs authorities will

not pass the shipping bill.

Guaranteed receipt Form Exporter -------- submit GR forms to custom for permission for shipment of

goods

custom authorities(duplicate)----Scrutinize form with reference to exchange regulation

original copy retained by customs

RBI ------- Original copy forwarded by Customs to RBI

Exporter ------- Duplicate copy handed over to exporter by customs authorities

Negotiating bank --- --- payment for export is to be realized. Duplicate copy of Form GR will

be retained by the bank till full export proceeds are realized.

RBI ------------- When payment is received the bank will send duplicate copy of form

GR to RBI

Contents of GR Name of Exporter

Name of negotiating bank

Currency in which payment will be received

Port of origin

Port of destination

Commission or discount payable on export

Quantity, Quality and value of exports.

Import Documents

Transport Documents

Bill of Entry

Certificate of inspection

Certificate of Measurements

Freight Declaration

Import Document Bill of Entry: -When goods enter the dock of the importing country.

Types:

-BoE-in case of goods for home consumption

-BoE for free goods,-imported without paying custom duty.

-BoE when goods are kept in bonded warehouse

Contents: -Name and address of the importer, Exporter.

-Description of goods

-Value of goods

-Import License number of importer

-Name of the port/dock where goods are to be cleared

-Rate and amount of import duty payable.

Certificate of Inspection Issued by Inspection Authorities in the country of the exporter.

Document sent to importer by the exporter through his bank.

Certificate states that

- goods have been inspected under the recognized quality control standards

- Satisfies the specifications provided under quality control and inspection.

This one Certificate of inspection by China National Center for Quality Supervision and Test of

Woodworking Machinery.

provided to a premise that successfully met the conditions for safe food handling on the date of its last

inspection.

Certificate of Measurement Two ways freight(goods) can be charged:

-Basis of weight

-Measurement

When freight is charged on the basis of weight, the weight declared by the

exporter is accepted.

The exporter can obtain certificate of measurement either from the Indian

Chamber of Commerce or any other approved organization.

Submit it to shipping company for calculation of applicable freight.

Certificate contains details like name of the vessel, port of destination,

description of goods,length,breadth,quantity,depth etc of packages.

www.iso.org

International Organization for Standardization

www.iso.org

International Organization for Standardization

ISO has developed over 18 000 International Standards on a variety of

subjects and some 1100 new ISO standards are published every year.

ISO (International Organization for Standardization) is the world's largest developer and publisher of International Standards.

ISO is a network of the national standards institutes of 163 countries, one member per country

Indian Representative- Bureau of Indian Standards(BIS)

"International Organization for Standardization" would have different acronyms in different languages ("IOS" in English, "OIN" in French for Organization internationale de normalization), its founders decided to give it also a short, all-purpose name.

Why standards matter When products, systems, machinery and devices work well and safely, it is

often because they meet standards. Ex: AGMARK,ISO,NAAC etc.

Standards ensure desirable characteristics of products and services such as

quality, environmental friendliness, safety, reliability, efficiency and

interchangeability - and at an economical cost.

when standards are absent, we soon notice. We soon care when

products turn out to be of poor quality, do not fit, are incompatible

with equipment that we already have, are unreliable or dangerous.

Ex:Garments

ISO does not certify

ISO does not carry out ISO 9001 or ISO 14001 certification .

ISO does not issue certificates.

ISO does not accredit, approve or control the certification bodies.

ISO develops standards and guides to encourage good practice in accreditation and certification.

It means that an independent, external body has audited an organization's management system and verified that it conforms to the requirements specified in the standard (ISO 9001 or ISO 14001).

ISO 9000 family- Quality Management Standard

ISO 14000 family- Environment Management standard

The ISO 9000 family

ISO 9001 -standard that gives the requirements for a quality management system.

ISO 9001:2008 - latest, improved version.

It is the only standard in the ISO 9000 family that can be used for certification.

There are 17 other standards in the family that can help an organization on specific aspects such as performance improvement,

Objectives of ISO 9000

To facilitate international trade of goods and services

To achieve competitiveness by obtaining required quality in cost effective

way.

To help industries improve their quality standards.

To promote total quality Control Systems

ISO-9000 Series of 5 international standards on

Quality Management

Standards

ISO 9001 Design,Development,Production,Installation and servicing

ISO 9002 Development,Production,Installation

ISO 9003 Final Inspection and Testing of Laboratories, Warehouse etc

Guidelines

ISO 9000

ISO 9004

VIDEO-1

Advantages of ISO 9000

Widespread Adoption: helps to win over markets purely based on quality goods and

services.

Valuable to Indian Exporters:

- European Union insists on ISO 9000 registration .

- Since ISO 9000 is internationally recognized quality standard ,Indian firms gets entry

into EU countries to promote trade.

Reliability and durability:

Organization successfully manufacture goods as per established specifications.

Performance of the product is highly reliable

Chances of product failure is low.

Business Links established:

- Indian exporters prefers to buy raw materials and Components from those firms that

they have ISO registration

Consistency in quality:

-ISO 9000 ensures consistency in quality of goods and services.

- Facilitates early detection of mistakes and timely corrective action.

Manpower development:

- ISO 9000 encourages management to provide training to all employees

- Improves Ability, Skills and commitment of employees towards organization.

Procedure for ISO 9000 Registration

Preliminary investigations

Selection of Registrar

Pre-assessment by Auditing body

Negotiate terms with registrar

Audit of quality manual

Submission of Application

Assessment by Audit Team

Issue of Certificate

Preliminary investigations

Export firm desiring to get ISO 9000 certification should conduct self evaluation

determine quality control infrastructure.

Work is assigned to team of specialists working with firm.

Submission of application

- Name, location & structure of the company

- Location of plant

-Size of the business

- range of products

- type of manufacturing process

-name of products, etc

Audit of Quality manual (PDF File)

-Existing quality manual is audited

- compares with 20 elements of ISO 9000 standard

- Report is prepared on findings

- if deficiencies occurs corrected

-manual is resubmitted for approval by auditing body

Selection of Registrar:

-Registrar is an independent body with knowledge ,skills and experience to evaluate

-Consideration in selection of registrar:

-

-Reputation of the registrar

- Time required to start and complete registration

-Location of registrar

- familiarity of the registrar with company needs

-auditing by registrar or by the sub-contractors, etc.

Negotiate terms with registrar

- Before signing the contract, company should establish scope of services and costs

involved.

-time needed to conduct audits

-secrecy of confidential information

-details of contract

-cost and fee structure,etc

Pre-assessment by Auditing body:

Auditors may look for 3 things:

-sufficient documents as per standards

-implementation of documented procedure

-whether implementation is effective.

Assessment by Audit Team:

-

procedures

a) Opening meeting:

-presided by the leader of audit team

-Meeting is attended by CEO,HOD and Management Representative.

-Leader will explain scope and area of Audit

b) Conducting assessment:

-Each auditor should be accompanied by the guide who is familiar with the

activities of the departments

-The auditors will record the observations which must be signed by the guide

indicating acceptance

C) closing meeting and presenting report:

i. All members should be present when the audit team present their

finding to the firm

ii. On daily basis, audit team will present to the firm non-conformities

observed for necessary corrective measures.

iii.corrective measures are carried out within fixed period of time.

Issue of certificate:

-Auditors should ensure whether the company has compiled with the ISO

9000 standard.

-Auditors if satisfied will submit favorable report to the registration board.

- If registration board approves the registration, the registrar issues a

certificate which enables the company to use ISO 9000 mark.

Suspension/Cancellation of Registration

A registrar can suspend or cancel the registration because of:

a) Non payment of fees

b) Non communication of changes in the quality system to the registrar

c) Fraud, negligence or improper uses of symbols

d) Non-implementation of corrective actions.

VIDEO-2

Established in 1967

AIM:

-Provide all industries with a structure for an environmental management system to obtain environmental objectives of the firm.

Consist of 20 standards-environmental labeling and evaluating life cycle of

the products.

Environmental Management Systems

(BIS 14000)

The ISO 14000 family

ISO 14001 is the standard that gives the requirements for an environmental management system.

ISO 14001:2004 is the latest, improved version.

It is the only standard in the ISO 14000 family that can be used for certification.

The ISO 14000 family includes about 25 other standards that can help an organization specific aspects such as auditing,

Environmental Management System (EMS):

The part of the overall management system that

includes organizational structure, planning

activities, responsibilities, practices, procedures,

processes and resources for developing,

implementing, achieving, reviewing and

maintaining the environmental policy

5 principles Formulate an environmental policy and commit itself to environmental

management system.

To prepare and keep ready a plan to achieve its environmental goal.

To develop the capabilities, and support mechanism to achieve its

environmental policy and objectives.

To review environmental management system in order to improve overall

environmental performance

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E n v ir o n m e n ta lS y s te m

M a n a g e -m e n t

R e v ie wP la n n in g

E n v ir o n -m e n ta lP o lic y

4 .2

Im p le -m e n ta t io n

& O p e r a t io n

C h e c k in g& C o r r e c t iv e

A c t io n

4 .3

4 .4

4 .5

4 .6

14000 certification

Two Areas

-Organizational Evaluation

-Product Evaluation

a) Organizational Evaluation:

1. EMS standard:

-Company follows a system to meet environmental goals through a formal

environmental policy.

-Employees are communicated about environmental specifications

-Necessary documents are prepared and workers are given relevant training.

2. Environmental Auditing Standards:

-Prescribes the qualification of auditor

-procedure of audit

- observing all the principals of auditing

3. Environmental Performance Evaluation Standards:

-Company needs to evaluate its EMS to ensure system is in place.

-Evaluation can be in areas such as- reduced consumption of water and energy,

decline in air emission, cutting down generation of hazardous waste etc.

- After evaluation if results are positive it indicates environmental responsibilities

are well performed.

Product Evaluation:

1. Environmental Labelling Standards:

-Standard is directed towards preventing exaggerated & false advertising

-A company using environmental product advertising or making claims for

eco-friendly products must do so under BIS-14000.(next slide)

2. Life cycle Assessment:

-Company need to prepare report - impact of product on environment from

design to disposal stage.

- Company will be able to get less hazardous materials or reengineering process

to reduce consumption of energy and water

3. Environmental Aspects in product standards:

- Analyst must know and check composition of product-harmful ingredient is

present in product.

Marine Insurance Types of Marine Insurance policies:

- Voyage policy

-Time policy

-Mixed policy

-Valued policy

-Valued policy

-unvalued policy

-Floating Policy

-Blanket Policy

-Specific Cover policy

-Open cover policy

-Fleet Insurance policy

-Port Policy

-Composite Policy

-Currency Policy

-Block Policy

1.Voyage(journey/trip) Policy

One specific Voyage(trip)

The cargo is insured for one trip only

Compensation is also paid for one trip if goods are damaged in that voyage.

Policy expires after completion of the journey of goods to the destination.

Time required for voyage is not considered.

2.Time Policy

Gives Protection/insurance for particular period of time

Goods are insured for certain period of time e.g.-one year

Compensation is paid only when the loss is in that particular specified period.